Terra Nova extension project to move forward
Suncor, Cenovus, Murphy announce agreement to extend the life of the FPSO and associated field
The co-owners of the Terra Nova Floating, Production, Storage and Offloading (FPSO) facility and associated Terra Nova field have announced a restructuring of the project ownership and plans to move ahead with a life extension plan.
Under the restructuring, Suncor will own 48 percent of Terra Nova, up from 38 percent, followed by Cenovus at 34 percent (up from 13 percent) and Murphy Oil owning 18 percent (previously 10 percent). The agreement also includes the previously disclosed royalty and financial support from the Government of Newfoundland and Labrador including up to $205 million, on a matching contribution basis, to support local onshore and offshore work related to the Asset Life Extension Project.
"The decision to move forward with the Terra Nova project is a concrete example of Suncor's commitment to invest in projects that have strong economic returns and will provide long-term value for investors. This agreement also provides certainty for the 1,000 plus local direct and indirect jobs that support the project," said Mark Little, Suncor president and chief executive officer. "We appreciate the deep collaboration and support from the provincial and federal governments, which has been crucial to helping us reach this important milestone."
According to Cenovus, The Terra Nova asset life extension project will proceed, extending the life of the field to 2033. The FPSO will undergo maintenance work at the Bull Arm Fabrication site starting early September prior to sailing to dry dock in Ferrol, Spain later this year with a safe return to operations anticipated before the end of 2022. Gross production is expected to reach approximately 29,000 barrels per day in 2023.
"Sanctioning the Terra Nova asset life extension provides a superior value proposition for our shareholders compared with the alternative of abandoning and decommissioning the project," said Alex Pourbaix, Cenovus President & Chief Executive Officer.
Suncor and Cenovus are, at the same time, restructuring the White Rose asset, subject to a restart decision on the West White Rose project.
Cenovus will complete a restart evaluation by mid-2022, and if the proposal is robust enough to lead to a restart decision, Suncor will increase its interest in the White Rose field by 12.5 percent, to approximately 40 percent, in exchange for a cash payment.